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Effective April 1, Alcoa Electric Department rates will increase 9.65 percent due to a TVA rate hike.

Alcoa City Commission approved the passing on the rate increase to its customers Tuesday.

According to TVA, the increase is needed to help fund new power generation and energy efficiency initiatives to meet the growing demand for power.

This will mean Alcoa residential customers will pay an additional $7.25 for each 1,000 kilowatt-hours used. A customer using 1,386 kwh (system average monthly residential energy use) would have a bill of $117.65, an increase of $10.05 monthly .

"It's just a pass through. It's what it takes to pay TVA," said Alcoa City Manager Mark Johnson.

TVA's wholesale rates are increasing 7 percent.

The TVA Fuel Cost Adjustment will go up 4.8 percent. That increase is due mainly to the drought, which greatly reduced hydrogeneration, the least expensive form of power generation.

Instead TVA had to purchase power from other utilities and now needs to increase its own generation, including completing Watts Bar Nuclear Unit 2 and purchasing two existing gas-fueled plants.

The commission also authorized the mayor to sign the annual agreement with the U.S. Geological Survey for operation of the Little River stream gauge at the water treatment plant on Sam Houston School Road. The city cost will be $8,700. During the drought, this was the gauge used to measure the amount of water in Little River.

A bond issue of up to $10 million was approved. The money will be used to help complete the Service Center, on fire trucks, on Greenway trails and on road and intersection improvements.

Some of the money will also be used to finish the water treatment plant lagoon, reimburse water funds for the auxiliary waterline, the contract to bury the line, completion of Springfield Branch sewer rehabilitation Phase II and Overlook waterlines.